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Discussion Question 11-3 (LO. 5) Complete the paragraph below that outines the issues that may arise if a partner contributes appreciated property to a partnership and then other property is later distributed to that partner. If appreciated property is contributed to the partnership and other appreciated property is later distributed to that partner, the distribution of the other property may trigger gain recognition to the . Gain is recognized to the extent of the Of (1) the precontribution gain or (2) the fair market value of the distributed property over the partner's basis in the partnership Interest the distribution. If the property distribution occurs more years after the initial contribution, this rule does not apply and ordinary distribution rules are followed The partner's basis in the partnership Interest is by the amount of gain recognized. In addition, the partnership's basis in the original precontribution gain property is increased by that amount the partnership has a $ 754 election in effect. than